The Ministry of Defense Frees Up the Budget for the Merkava Project

photo RP Defense

5/4/2012 Amir Rapaport - israeldefense.com

The Merkava Mark IV represents the backbone of the Israeli Armored Corps, while the Namer is a heavy APC based on the chassis of the Merkava tank

In an effort to prevent the collapse of fifteen Israeli companies, the Israeli Ministry of Defense freed up 50 million NIS to allocate towards orders for the Merkava tank and Namer APC project.

The Merkava tank project, which includes the production of tanks and a large number of Namer APCs, is one of Israel’s largest national projects, providing approximately 1.1 billion NIS annually to the Israeli factories involved in its production.

Initially, the defense establishment considered canceling or severely reducing the project, but didn’t due to defense and economic considerations.

Then, four months ago, a decision was made by the Ministry of Defense to halt orders for the tanks following a dispute with the Treasury over the size of the defense budget.

Following the decision to reduce production, the factories involved in the project were notified only after work orders had already been transferred. It was clear that the announcement would entail considerable financial repercussions for those factories, along with hundreds of subcontractors that also make a living from it.

As a result of the halted orders, many of the factories involved in the project faced the risk of closure, and the mayor of Kiryat Shmona even threatened to have the entire city go on strike.

Most recently, the Director General of the Ministry of Defense, Major General (Res.) Udi Shani, instructed for a sum of 50 million NIS to be allocated to factories in places such as Kiryat Shmona, Sderot, and Mitzpe-Ramon.

However, there are some ministers, as well as several IDF officials, who believe that the number of tanks and APCs that the IDF intended to produce was "excessive." Moreover, there are several persons in the ground forces that disagree with the type of tank even being produced. Major General (Res.) Yiftah Ron Tal, former commander of the Ground Forces, even called the Namer "a $5 million bus.” During a symposium recently organized by IsraelDefense, Ron Tal added, “This represents a step back. This instrument should have been designed in a completely different manner.”

At this stage, according to the instructions of the Ministry of Defense, work will continue on orders received several months ago, and which are in advanced stages. However, all work orders for new components, whose production has yet to start, are cancelled.

If the decision stands, the halting of the project could cost thousands of Israeli employees their jobs.

The Ministry of Defense did not comment in response to this article.